Audit of the Department of Justice, Office of the Federal Detention Trustee

Audit Report No. 05-04
December 2004
Office of the Inspector General

Findings and Recommendations

The Role and Functions of the OFDT

In December 2000, Congress approved a Department request and created the OFDT to centralize and oversee all detention functions. However, although the office has been in place for almost four years, the OFDT has not been able to complete this undertaking. Progress has been hampered by the lack of an overall and consistent vision as well as other major factors, including the creation of the Department of Homeland Security (DHS), which resulted in the movement of INS and its alien detention responsibilities and funding out of the Department. In addition, Congress has changed and expanded the OFDT's responsibilities, causing further uncertainty regarding the organization's purpose. The OFDT has also suffered from significant staffing weaknesses, including a period of almost 18 months during which the Detention Trustee position was filled on a temporary basis with an Acting Trustee. The Department has recently taken action to fill the Detention Trustee position. However, it must still make fundamental decisions regarding the role and functions of the OFDT and coordinate this effort with Congress, OMB, and DHS.

Since the OFDT was created in FY 2001, many extraordinary events, both internal and external, have occurred in its short existence. Below is a description of these events, in chronological order. A graphic representation of the significant events is displayed as a timeline in Appendix III.

Standing Up the OFDT

As previously noted, the Department attempted to solve longstanding concerns regarding detention through the creation of the OFDT. The OFDT was envisioned to be a small office operated separately from the existing components involved in detention - USMS, INS, and BOP - in order to develop solutions to issues that went beyond individual component interests. The OFDT was placed under the direct operational responsibility of the Deputy Attorney General to ensure that the office had both independence and credibility within and outside the Department.

In December 2000, Congress approved the request and created the OFDT to "...be responsible for construction of detention facilities...; the management of funds appropriated to the Department for the exercise of any detention functions; and the direction of the USMS and INS with respect to the exercise of detention policy setting and operations for the Department."12 Congress appropriated approximately $1 million in both FY 2001 and FY 2002 for the establishment and continuation of the organization.

The first Detention Trustee, a member of the Senior Executive Service, came on board in September of 2001, about nine months after the formal creation of the OFDT. The Trustee was a career civil servant with almost 30 years of experience, most of it in the BOP and related to federal prisons and prisoners. At the time he took office, the authorized full time equivalent (FTE) ceiling at the OFDT was three. Following the selection of the Trustee, the office began to take shape with the leasing of office space and hiring of personnel. In FY 2002, the OFDT's FTE ceiling was raised to six.

During these two initial fiscal years, the small OFDT staff began working on a baseline detention report, establishing uniform detention standards, and performing the other detention-related projects required by Congress, such as the regional detention pilot projects described in the Establishment of the OFDT section of this report. However, the OFDT had not yet begun to perform direct detention activities such as procurement planning or forecasting of detention needs.13

The Department's Plan to Merge the OFDT into the BOP

In March 2002, just six months after the initial Detention Trustee was hired, the Department began formulating a plan to eliminate the OFDT as an independent entity and transfer its functions and personnel into the BOP. According to a proposal submitted to OMB in October 2002, Department officials believed that this organizational change would reduce bureaucratic layering, streamline the Department's detention functions, and eliminate duplication of resources. The effort to transfer the OFDT's functions to the BOP lasted for about 15 months. In May 2003 OMB officially rejected the Department's proposal and expressed its desire for the OFDT to remain independent.

OFDT officials told us that while the proposal was awaiting OMB approval, OFDT staff met with BOP officials approximately every two weeks to work on the details of the transition. In addition, the OFDT was instructed by the Department not to hire any additional staff during the time that the proposal was under consideration.

OFDT Leadership

After serving 15 months, the first Detention Trustee retired in January 2003. The Department named the OFDT's GS-15 Director of Programs as the Acting Detention Trustee. Throughout the spring of 2003, the Department pursued filling the vacancy and a qualified replacement was selected. However, this candidate turned down the position in June 2003, because, according to several Department officials, the candidate viewed the OFDT as an unstable organization. In our opinion, the apparent lack of support on the part of the Department for an independent OFDT likely contributed to the concerns about instability.

In November 2003, Department officials stated that a recruiter was employed to find a new Detention Trustee, and it was hoped a new candidate would be hired quickly. The position was announced and open from December 15, 2003, until January 15, 2004. However, Department officials reported that the applicants did not meet their needs and, as a result, the position was not filled from this announcement. Instead, the Department directed a member of the Senior Executive Service currently serving as a USMS Assistant Director in the Prisoner Services Division to transfer into the vacant Detention Trustee position. She reported for duty at the OFDT on June 15, 2004. Before her arrival, the Detention Trustee position had been vacant for almost 18 months.

FY 2003 Budget Enhancement

The FY 2003 federal budget, which was approved by Congress in February 2003, called for the detention funding of the USMS and the INS (totaling over $1.3 billion) to be transferred to the OFDT, giving the office the budgetary authority over all detention activities. However, day-to-day detention operations remained with the USMS and INS.14 The legislation also included language calling for the Justice Prisoner and Alien Transportation System (JPATS) to come under the control of the OFDT.15

At the time that these funds were transferred, the OFDT was under the direction of the Acting Detention Trustee, and a total of only five individuals were on board. In our opinion, the office was ill-equipped to handle such a large change in fiscal responsibility.

The FY 2003 appropriation included funding to hire an additional 12 staff, but as previously reported, hiring remained on hold while the Department attempted to merge the OFDT into the BOP. In addition, FY 2003 budget legislation documents from the Senate included recommendations for a transfer of USMS, INS, and BOP staff to the OFDT so that it could assume full operational control of bed space management. The Senate advised that it was concerned that the OFDT did not have control of detention personnel and urged the Department to rectify the problem. However, this language was not included in the official FY 2003 budget or the accompanying conference report; the appropriations language remained essentially the same as the prior year.

The Senate language, however, indicated a change in the Senate's intentions for the depth of the OFDT's responsibility. The language appeared to envision a larger organization capable of running the day-to-day operations of detention, which was a marked change from the small, $1 million organization initially established. The Department responded to this change of direction by assigning the Justice Management Division's Management and Planning Staff (MPS) to develop a plan for a transfer of necessary staff.16

Creation of the Department of Homeland Security

As a result of the creation of the Department of Homeland Security (DHS), the INS left the DOJ in March 2003 and the enforcement portion of the INS (which included detention) was reorganized as the Bureau of Immigration and Customs Enforcement (ICE). This shift had major implications for the OFDT.

Just one month after the federal budget was approved in February 2003, the OFDT was required by Congress to transfer the INS's detention budget (about $600 million) to DHS. Most importantly, with ICE's detention activities and funding no longer under the responsibility of the Department, the OFDT did not have the authority to oversee all detention activities and fulfill its original, congressionally mandated mission.

Beginning in the spring of 2003, OFDT and ICE officials met to discuss centralized oversight of detention by the OFDT through the formation of an Interagency Agreement (IAA), but they could not agree on the terms. Consequently, in September 2003, OMB was brought in to help with the negotiations, and in November directed ICE to sign an IAA by December 3, 2003. Even with this intervention, disagreements continued and an agreement was not finalized until January 28, 2004.

We asked ICE officials what issues had to be resolved before an agreement could be reached. First, ICE officials noted that its alien detainees are entitled to certain privileges that are not required to be provided to criminal detainees, such as access to telephones, legal materials, pro bono legal guidance groups, consular offices, and recreation. Detention officials at ICE told us that they were concerned that the OFDT might not agree with the priority of these privileges and the detention facilities procured by the OFDT might be more suitable for the criminal detainees in the custody of the USMS. Second, ICE was concerned about the proposed consolidation of previously independent facility inspections being done by USMS and ICE personnel. Specifically, officials worried that the additional entitlements for ICE detainees mentioned above would not be evaluated as part of the consolidated inspections. The third issue of concern to ICE was how to determine the value of the services provided by OFDT. Finally, ICE officials opined that the OFDT staffing level might not be adequate to perform the necessary functions, including ensuring good communication with ICE.

The IAA, which was signed on January 28, 2004 (11 months after the transfer of INS to DHS), was broad in nature, limiting the authority of the OFDT to perform procurement and contract management services for non-federal facilities and inspections of such facilities. The IAA did not involve the OFDT in other ICE detention issues such as projection of future detention needs, planning of detention space, or general detention policy-setting. In fact, the IAA named the OFDT as "a provider of procurement and contract/agreement management support for the ICE non-federal detention program" [emphasis added]. This language allowed ICE to use the OFDT for procurement services on an ad-hoc basis. Since signing the IAA, ICE has requested OFDT assistance with six contracts for detention space. According to OFDT officials, the office has reviewed the requests and has begun to take necessary action (such as reviewing environmental assessments or developing the necessary requests for contract proposals), but no contracts have been put out for bid as of August 16, 2004.

The IAA negotiation process required significant time and effort on the part of the OFDT and, in our opinion, distracted the organization from addressing other detention needs, such as population-forecasting and long-range planning. In addition, the transfer of INS out of the DOJ fragmented the government's detention efforts and caused further disruption in the mission of the OFDT. Within the DOJ, all non-federal detention operations were now under the responsibility of the USMS. Without a need to centralize a function once performed by two Department components, some questioned the need for the OFDT. As a result, the future of the office was viewed as uncertain.

Reimbursement Agreements with USMS for Detention Funding

As previously stated, the OFDT received an enormous budget enhancement in FY 2003 because it was given control of all DOJ detention funding that, in the past, had been budgeted to the USMS and INS. After transferring INS's funding to DHS, the OFDT only remains in control of the USMS's detention funding. However, the OFDT does not directly expend these funds, but instead acts as a pass-through entity.

On March 25, 2003, the OFDT and the USMS entered into a Reimbursement Agreement that set up the system by which the $758 million for FY 2003 expenses related to the detention of federal prisoners housed with non-federal service providers would be forwarded from the OFDT to the USMS.17 Specifically, on a quarterly basis, the OFDT advanced funding to the USMS to cover its expected detention expenditures during that period. The USMS then submitted a monthly certification of summary expenditures made, along with automated expenditure listings of all USMS district offices. The OFDT reconciled the certifications to the district expenditure data.

In our opinion this process for the oversight of USMS detention expenditures is superficial, without written policies or procedures that govern the process. Further, the OFDT has been only minimally involved in detention-related decisions (such as what facilities are used and the price to be paid) and the subsequent disbursement of funds.

Addition of JPATS

In addition to the previously mentioned increases in fiscal responsibility in FY 2003, Congress again directed in the FY 2004 budget that JPATS and its $87 million in funding be transferred to the OFDT. Operated by the USMS, JPATS on average performs more than 270,000 prisoner and alien movements a year. Its operations are financed through a revolving fund, with each user paying for services on a flight cost-per-hour basis.

Created in 1995 through the merger of the air fleets operated by the USMS and the former INS, JPATS operates a fleet of aircraft, cars, vans, and buses and routinely serves approximately 40 cities. It supports the federal judiciary by scheduling and transporting prisoners to courts and detention facilities around the country, including sentenced prisoners who are in the custody of the BOP. JPATS also transports ICE criminal and administrative aliens to hearings, court appearances, and detention facilities. In addition, JPATS provides regular international flights for the removal of deportable aliens. JPATS is also available to military, state, and local law enforcement agencies to shuttle their prisoners between different jurisdictions. As of FY 2004, JPATS had 146 permanent staff in addition to approximately 210 contractor personnel.

The transfer of JPATS to the OFDT was first suggested by the Senate during the FY 2002 budget process, in which it said, "[m]anagement of JPATS is precisely the sort of task that should be undertaken by the Detention Trustee."18 The intent was that the OFDT would be an impartial arbiter and be able to quickly resolve disagreements among the users of JPATS. The JPATS transfer was not included in the budget, however, until FY 2003.

With the passage of the FY 2004 budget, Congress firmly expressed its desire for the OFDT to manage JPATS by again directing the OFDT to become responsible for the management of JPATS. However, Department officials continued to believe that transferring JPATS to the OFDT was not feasible at that time because the future of the OFDT was uncertain due to the events outlined above (i.e., the retirement of the Detention Trustee, the increase in budget authority in FY 2003, the transfer of INS to DHS, and the protracted negotiations with ICE relating to the terms of the IAA). Further, although the FY 2003 budget raised the OFDT staff size to 18, the office was not fully staffed until July 2004.

Currently, much remains uncertain about JPATS. The Department has not taken action to transfer the management of JPATS to the OFDT. The new Detention Trustee has held discussions about JPATS with Department officials, congressional staff, and OMB, and has asserted that the matter will be addressed as soon as possible. In the meantime, JPATS remains under the umbrella of the USMS.

In response to Congress' recommendations for the OFDT to receive a transfer of necessary detention staff from BOP, ICE, and USMS, Department officials required the MPS to assist the OFDT in determining its personnel needs. In March 2004, MPS submitted a proposal to the Attorney General recommending that the OFDT receive 37 additional FTEs in order for it to be capable of handling day-to-day detention operations, such as facility inspections and contract management. Specifically, 19 positions would be transferred from the USMS and 18 positions would be funded through a reimbursement agreement with ICE.

Although this was the final proposal submitted, MPS drafted several different plans and had extreme difficulty determining the number of staff to be transferred. Officials stated that this was because Department officials, USMS, ICE, and OMB were not in agreement about what functions the OFDT would eventually undertake. For example, the OFDT believed that Congress expected it to be involved in the day-to-day operations of all detention in non-federal facilities. The USMS opined that the OFDT was to be only an oversight agency and therefore would not require the number and types of staff being discussed for transfer. As a result, there were many versions of the proposal, particularly as it related to the transfer of USMS personnel. The first proposal reflected a transfer of 25 USMS positions. In subsequent draft proposals, this was increased to 35 and later decreased to 19 and then to 9 positions. The final proposal presented for approval to the Attorney General and OMB called for a total transfer of 37 positions (19 from USMS and 18 from ICE). According to an MPS official, this proposal has been shelved due to the recent appointment of the new Detention Trustee, who is now responsible for determining the staffing resource needs of the OFDT.

The FY 2004 budget process also brought to light another challenge for the OFDT related to the functions expected to be performed by the office. This challenge specifically related to whether the OFDT had the authority to contract for construction of a detention facility. The legislation that established the office in FY 2001 stated "the Trustee shall be responsible for...construction of detention facilities or for housing related to such detention..."19 Similar language was included in the FY 2002 budget. Believing that it was well within the authority granted to it, the OFDT became involved in a construction contract, as detailed below.

In response to a growing need for detention bed space in the Washington, D.C./Baltimore, Maryland, area, the USMS and INS submitted a joint request in July 2001 to the Department asking for authority to pursue a 20-year contract with the private sector for 1,500 detention beds. The components estimated that these beds would be needed by July 2005. The request was forwarded to the OFDT, which began assessing existing detention bed space in the region and determined that the only way to solve the problem would be to build a private, non-federal facility in Maryland or the District of Columbia. In July 2003, the OFDT began the procurement process by issuing a pre-solicitation notice for a private detention facility to be constructed. The notice required potential providers to submit site surveys within four Maryland counties or the District of Columbia. In September 2003, the OFDT received four surveys to build a private, non-federal detention facility in Maryland.

The procurement process was cancelled, however, when Congress learned about the construction plan during the FY 2004 budget process and expressed its concern that the OFDT was addressing detention needs by contracting to construct a facility. In reports accompanying the FY 2004 budget, Congress further stated that construction was a BOP function and was never intended to be undertaken by the OFDT.

Need for Establishment of the OFDT's Role and Functions

The circumstances detailed above illustrate the changing landscape in which the OFDT has been operating. OFDT officials agreed that it has been a difficult task to lead the organization through such significant changes. Throughout our audit we interviewed staff and management at the OFDT, USMS, ICE, BOP, the OMB, the Justice Management Division, and officials in the offices of the Deputy Attorney General and Assistant Attorney General for Administration, and almost everyone we encountered expressed frustration over the seemingly constant change surrounding the OFDT and the confusion this caused. More importantly, the officials we interviewed expressed different opinions as to what the role of the OFDT was expected to be. The office was viewed by some as an administrative office responsible for overall oversight of detention issues. Others believed that the office was expected to run detention operations on a day-to-day basis, including conducting all inspections, contracting for bed space, and forecasting detention needs for the government as a whole. Clearly, these individuals did not have a consistent, clear vision of the office's purpose or the direction in which it was heading.

In our judgment, it is essential that the Department and the OFDT, in consultation with OMB and Congress, conclusively determine the role of the office, including its relationships with ICE and JPATS. Once these fundamental decisions are made, the OFDT needs to establish a strategic plan that outlines its vision, mission, and functions, along with the steps it will take to achieve them.20

Recent Developments

As mentioned previously, the Detention Trustee position was filled with an Acting Trustee from January 2003 to mid-June 2004. During this period, Department officials reported having difficulties identifying a suitable applicant with the appropriate experience in both management and detention. This problem was solved through the directed transfer of the USMS Prisoner Services Division Assistant Director. The new Detention Trustee reported for duty on June 15, 2004 and provided us with an overall outlook for the OFDT.

Role and Functions - The Detention Trustee agreed that there had been a general lack of consistency concerning the OFDT's role and functions. She explained that the first order of business must be to determine if the OFDT is going to manage detention through an indirect or direct command and control structure. An indirect structure would result in the OFDT acting as an overseer or administrator of detention matters, with the USMS and ICE performing the actual detention functions. A direct command and control structure would place the OFDT in the role of managing the day-to-day operations of detention that are performed throughout the country.

In early August 2004, the Detention Trustee presented Department management with a draft proposal for the OFDT to act as an overseer for the overall DOJ detention program. This would primarily include strategic bed-space management (e.g., advanced procurement planning and standardization of per diem rates), budget execution and formulation (e.g., forecasting and statistical analysis), and policy setting (e.g., cost containment initiatives and confinement standards). Upon receiving positive feedback from Department officials, the OFDT began developing a formal proposal and strategic plan.

ICE Involvement - The Detention Trustee acknowledged that the current agreement with ICE is not an optimal solution for solidifying the working relationship between the two organizations. The proposal submitted to the Department outlining the suggested functions for the OFDT includes provisions for the office to assist ICE in the accomplishment of the same broad detention functions for which it would act on behalf of the DOJ, except for budget execution and formulation. The Detention Trustee believes that the IAA can be slightly modified to accomplish this, which will improve the effectiveness of the OFDT and federal detention as a whole. She further believes that ICE will be receptive to such changes in the IAA.

JPATS - The Detention Trustee noted the uncertainty surrounding the issue of transferring JPATS to the OFDT. She said that she and Department management are still examining the feasibility and necessity of placing JPATS under the umbrella of the OFDT.

Staffing - The Detention Trustee has recently filled the long-vacant position of Deputy Trustee.21 In addition, the Detention Trustee plans to evaluate the staffing needs of the office once the OFDT's role and functions are formally established and a strategic plan is in place to guide the office in the accomplishment of its mission. Further, the Detention Trustee stated that the current OFDT personnel provided important skill sets relative to detention issues at the USMS and the BOP. However, she hopes to add staff with experience and knowledge relative to ICE detention matters.

USMS Reimbursements - To begin to strengthen the process by which detention monies are transferred to USMS, the Detention Trustee initiated a process in July 2004 to eliminate the need for the advancement of funds. The intent of the new process is to have the OFDT pay out against bona fide obligations to allow the office to better account for the funds it controls.

Outreach - The Detention Trustee has met with officials from OMB and Congress and discussed with them the continuing detention weaknesses and the challenges that have faced the OFDT. She outlined preliminary plans to address these issues and reported that the officials responded favorably and expressed their continued support for the OFDT in its endeavors to address critical detention issues. The Detention Trustee stated that she intends to continue to communicate with OMB and Congress as she works with the Department to establish the role and functions of the OFDT.

The Future of the OFDT

After an extended vacancy, the Department has taken action to place an experienced executive in the Detention Trustee position. The new Trustee has acknowledged the weaknesses in the OFDT's operations due to the lack of a clear and consistent vision for the organization. She has provided a proposal to management for the OFDT to undertake an oversight role. Acknowledging that a sizeable portion of federal detention now is outside the control of the DOJ, she believes that the OFDT can provide a valuable service to the Department in addressing the concerns that still exist, such as population forecasting, procurement planning, and cost containment initiatives.

The Department's recent action to fill the long-vacant Detention Trustee position has demonstrated its support for the existence of the OFDT. Moreover, in recent correspondence Department officials expressed to Congress a commitment to addressing the weaknesses in its detention management. Department officials also believe that there is a value in the continuation of the OFDT as an organization to address the myriad detention problems that have plagued the DOJ for over 15 years. In response on July 22, 2004, Congress stated that it considers the Department's recent actions to be positive steps to address detention issues and remains in support of the OFDT.

Conclusion

In FY 2001, $1 million was appropriated to establish the OFDT as a separate component within the Department responsible for centralizing and overseeing all Department detention functions. This congressional appropriation was made pursuant to a request from the Department, which was looking to solve longstanding concerns related to detention. Although the office has been in place for almost four years, the OFDT has not been able to carry out its mission.

The governmental reorganization that resulted in the movement of INS and its detention functions and funding out of the Department had a profound effect on the OFDT. This move called into question the need for the OFDT and set into motion a protracted negotiation over the terms of an agreement between ICE and the OFDT for the provision of certain services related to detention of aliens in non-federal facilities. Although an agreement was signed, this situation has not been completely remedied; the IAA does not give the OFDT the authority to accomplish the mission of overseeing detention in non-federal facilities.

In addition, congressional action has changed the character and spirit of the OFDT from the small office that was first proposed by the Department to a larger, more encompassing entity. Specifically, the budget increased significantly from FY 2002 to FY 2004, primarily a result of the transfer of detention funding from the USMS and INS to the OFDT. Also, Congress has expressed that the OFDT should take over the responsibility for managing JPATS. The OFDT was expected to take on responsibility for these activities and the related fiscal accountability before the appropriate staffing level was determined and filled, and before the OFDT and the Department had formally established the role and functions of the office.

Other obstacles have hampered the OFDT's progress, including the fact that the Detention Trustee position was vacant from January 2003 through June 2004. Further, a 2002 Department proposal to merge the OFDT into the BOP would have eliminated the OFDT's position as an independent agency. In contrast, the Department took steps in 2003 and 2004 to greatly increase the size and status of the OFDT. These actions illustrate, and our discussions with various officials confirmed, that individuals within the OFDT, the Department, OMB, and Congress have had different opinions about the breadth of the office's responsibilities.

In June 2004, the Department filled the Detention Trustee position with an executive with experience in detention issues and has illustrated its support for the OFDT. Congress and OMB have both acknowledged this move as a positive step in the Department's efforts to address detention problems and stabilize the OFDT. The Department and the OFDT must now make fundamental decisions regarding the office's role and functions, which can then be formalized into a strategic plan.

Recommendations

We recommend that the Department and the OFDT:

In coordination with OMB and Congress, clearly identify the OFDT's mission and responsibilities;

Prepare a strategic plan for the OFDT that clearly identifies and communicates the role, functions, and goals of the office;

Evaluate the functions assigned to the OFDT in order to ensure that the office has the necessary complement of staff, experience, and skill sets to carry out the strategic plan;

Evaluate the current IAA with ICE and determine if it best serves the government, the Department, and the OFDT, and if necessary, coordinate with ICE to make any necessary modifications;

Establish and communicate formal policies and procedures to manage the OFDT/USMS reimbursement agreement to ensure that the detention funds are properly monitored; and

Formulate and communicate a clear, firm decision regarding the responsibility for management of JPATS.

Budget Shortfalls

The number of individuals detained by the Department is steadily rising and therefore the associated costs are increasing as well. In FYs 2003 and 2004, the OFDT recognized that the funds budgeted for detention would fall short of the amount needed to fully fund detention costs. In FY 2003, the receipt of $40 million in wartime supplemental funds rectified the shortfall. For FY 2004, the OFDT projected the shortage to be approximately $109 million and Congress approved a Department request to reprogram funds to cover the shortage. Already for FY 2005, the Department has taken action to enhance the OFDT's budget through additional reprogramming of $150 million. The Department and the OFDT must address the continued lack of accuracy in estimating the cost of detention activities that has caused the shortfalls to occur and should follow through with planned steps to address the continually rising costs of detention. Finally, we believe the Department should examine IGAs as an additional cost saving measure.

Detention Projections and Budgeting

Budgeting for detention is not an easy task. Currently, the Department calculates the amount of funds to be requested for detention activities by using a statistical projection model that takes into account historical detention needs and the expected number of detainees on a daily basis. These calculations are impacted by various law enforcement and prosecutorial initiatives. There is little room for error because sufficient funds must be available for keeping the detainees (i.e., criminals or illegal aliens) confined.

The OFDT employs a statistician, who explained to the OIG that the BOP and other corrections agencies commonly use prison population models for projecting fluctuations in the number of incarcerated persons and the resulting need for space and other resources. He stated that these models use the relatively static population of prison inmates, where the length of the sentence is known and the sentence is usually longer than a year. He also stated that, on the other hand, the detainee population is much more unstable due to a turnover rate of about nine months.

Historically, the USMS had contracted with a company to develop a model and projections of its detainee population. According to the OFDT statistician, this company used a time series analysis to project the population, which is based on historical data. While the statistician believed the company made a good effort in projecting detention bed space needs, he thought improvements could be made in the methodology employed. Specifically, he believed the model should take into consideration prosecutorial variables such as whether the U.S. Attorneys accept or decline cases, the number of U.S. Attorneys that prosecute cases, and the number of judges that hear the cases.

In addition, by its very nature, budgeting occurs far in advance of the period in which funds are to be used. There is significant advance planning in the federal budget process; initial budget estimates are submitted about 18 months before the start of the fiscal year. To illustrate, the FY 2004 budget was initially compiled in the spring of 2002. Until the spring of 2003, the USMS had been responsible for preparing the budget for its detention activities. At that time, the OFDT took over the detention budget planning function by preparing the FY 2005 budget request.22

Identification of FY 2003 and FY 2004 Shortfalls

To monitor the execution of the detention budget, the OFDT reviews the USMS bed space utilization on a monthly basis and makes a comparison to the projected figures. During FY 2003, the OFDT projected that the funds budgeted for detention would not cover the expenses being incurred in the current fiscal year; in other words, they projected a shortfall. However, before officials moved to address the shortfall, the OFDT received $40 million through a Wartime Supplemental Appropriation.23 This funding covered the detention budget shortage in FY 2003.

We interviewed an OMB official in early FY 2004 and discussed the occurrence of the shortfall in FY 2003. At that time, we were told that if a shortfall occurred again in FY 2004, the Department would have to find the needed money within its own budget. The OMB official believed Congress would not assist the Department by appropriating additional funds.

Subsequent to the submission of the FY 2004 budget request, the USMS experienced a substantial increase in the number of detention beds utilized in non-federal facilities.24 The current population projection reflected a net daily increase of 1,905 detention beds over the projection included in the FY 2004 budget request. In order to accurately estimate the budget shortfall for FY 2004, the OFDT worked with the USMS to appropriately forecast its needs using year-to-date USMS detention data. Included in the estimate were the proportional increases in expenditures for medical services provided to detainees and guard services of hospitalized detainees. The OFDT calculated that the shortfall between the amount budgeted ($814 million) and the total amount needed for the remainder of the fiscal year equaled $109 million.25

In order to address the projected shortfall, the Department requested approval from both houses of Congress to reprogram $109 million from other Department programs to the OFDT. On April 1, 2004, the Department proposed the reprogramming and transfer of $77.7 million from surplus funds available in the Asset Forfeiture Fund and $31.3 million from the Working Capital Fund.26

Congressional Action and Department Response

In a letter dated April 20, 2004, the House Committee on Appropriations (Committee) approved the reprogramming and transfer of $77.7 million from the Asset Forfeiture Fund. At that time, Congress did not approve the $31.3 million transfer from the Working Capital Fund. Instead, the Department was directed to work on reducing the average number of days spent in detention, and to examine the entire detention process from commencement to incarceration, to find ways to operate within requested and appropriated funding levels. It advised that once this was done and the Committee was assured that appropriate actions were being taken, it might reconsider a request to reprogram the remaining $31.3 million.

In a letter to the Committee dated July 8, 2004, the Assistant Attorney General for Administration (AAG/A) provided a detailed explanation for the shortfall. He stressed that the individual contract jail costs had remained relatively flat and that the increased costs instead resulted from unanticipated increases in the number of detainees, thereby increasing the amount of necessary bed space and related costs. In other words, the shortfall was caused primarily by a higher number of beds needed, not the cost per bed. The AAG/A attributed the additional detainees to new and continuing law enforcement initiatives by the DOJ and DHS to secure the nation's borders and improve public safety. He noted that the OFDT was aggressively seeking more accurate forecasting methods, including working with federal law enforcement agencies and U.S. Attorney's Offices to assess their staffing levels and current and future law enforcement initiatives.

In addition, the AAG/A emphasized that the Department and the OFDT intended to take firm steps to reduce the average detention time during both the pre-trial and post-sentencing phases. These steps included:

establishing a high-level, interagency steering committee (headed by the Detention Trustee) to develop strategies for reducing the time from sentencing to commitment by targeting high volume districts where processing times are especially long;

developing an action plan for the implementation of the interagency steering committee's strategies through an accelerated pilot program along the Southwest border;

implementing a fast-track case-processing program by the Executive Office for U.S. Attorneys;

working with the federal judiciary to raise the awareness of detention costs and the projected shortfalls;

addressing weaknesses in the infrastructure that have not kept pace with population growth (e.g., transportation means) thereby increasing detention time and costs; and

exploring operational alternatives where it may be advantageous to move recently sentenced offenders to lower-cost beds pending their transfer to BOP custody because they no longer need to be located in close proximity to court facilities.

The Department expressed its hope that these plans and the recent hiring of a permanent Detention Trustee in June 2004 would provide the Committee with the assurance that it was looking for, and that as a result, Congress would provide its approval to transfer funds to cover the remaining shortfall of $31.3 million. On July 22, 2004, and August 5, 2004, the House and Senate, respectively, approved the Department's full reprogramming request. Further, the House expressed its support of the Department's efforts to address continuing critical issues related to detention.

Potential Cost Savings Related to IGAs

As noted above, the OFDT's efforts to reduce detention costs will focus on decreasing the amount of time individuals spend in detention. We believe that additional cost savings can be realized if the OFDT and the Department address deficiencies in the individual Intergovernmental Service Agreements (IGAs) established with state and local law enforcement agencies for detention bed space.

Historically, the OIG has conducted audits of IGAs and identified significant overpayments for detention space. Specifically, between FYs 1998 and 2003, the OIG conducted 17 IGA audits and identified questioned costs totaling in excess of $21 million. Our reports revealed the state or local governments' inclusion of unallowable, unallocable, and unsupported costs in the daily rates paid by the federal government to house detainees.27 For example, in FY 2003, we issued an audit of the costs incurred by the Orleans Parish, Louisiana Criminal Sheriff's Office to house federal detainees in accordance with an established IGA.28 We found that for FYs 2000 and 2001, the Department paid the facility about $10 million for bed space, which included overpayments of $4 million because the daily rates were overstated.

In the previously mentioned July 2004 letter to Congress detailing the Department's plans for addressing the shortfall in detention funding, the Department acknowledged that the individual agreements for detention space are expensive. However, the letter does not include any information about how, if at all, the Department will address the costly strategy. In our opinion, the Department's plans to contain detention costs should include examining the policies governing IGAs and reviewing individual agreements to identify any waste or unnecessary costs.

FY 2005 and Future Projections

The OFDT's involvement in the detention budgeting arena began in the spring of 2003 with the FY 2005 budget process. As previously reported, the OFDT statistician planned to improve upon the USMS's existing projection methodology by developing a model to more accurately project the detainee population by factoring in prosecutorial variables. However, the statistician explained that the new methodology was not yet ready and therefore, he utilized the old projecting process, with some minor adjustments, for the FY 2005 and FY 2006 budget submissions.

For FY 2005, the Department originally requested a $938.8 million budget for the OFDT. However, the Department has already identified that the same increasing detainee population in non-federal facilities will be present in FY 2005. As a result, they have requested another transfer of DOJ funds. On July 13, 2004, OMB forwarded to the President its approval of the Department's request to adjust its FY 2005 budget submission. Specifically, the Department provided the OFDT with $150 million in additional funding by transferring $60 million from the Working Capital Fund, $35 million originally budgeted for the deployment of the DOJ Consolidated Office Network in the BOP, and $55 million originally budgeted for a planned medium-security facility in Mendota, California. The $150 million increase in the OFDT's FY 2005 budget request, which now totals almost $1.09 billion, represents a 16-percent change in expected outlays over the original submission.

According to the new Detention Trustee, the FY 2006 budget request should be revisited as well. She pointed out that the shortfalls in FY 2003, FY 2004, and that which was anticipated for FY 2005, reflect the upward trend in the detainee population and associated costs. She further stated that while the OFDT will endeavor to contain the rising costs, it is unlikely that the trend will reverse and costs will return to earlier levels. Therefore, the OFDT will seek to have the $150 million FY 2005 adjustment added to its base detention funding for FY 2006 and beyond.

As noted above, the OFDT statistician has identified possible enhancements to the projection model and had planned to implement them for the FY 2007 budget process. The new Detention Trustee agrees that the Department must do a better job forecasting its detention bed space needs and has stated that implementing a new projection model is a high priority. She stated that contracting with private firms for this service is expensive and might not be the most cost-effective method for projecting. She also said that the OFDT will research the options available, including those available in-house and in the public sector, and take necessary steps to implement a revised, more precise, and cost-effective method of estimating future detention bed space needs.

Conclusion

Recent budget projections of detention bed space needs have been significantly inaccurate. The OFDT statistician attributed the lack of precision to weaknesses in the projection model used to estimate future detention statistics. The inaccuracies have lead to funding shortfalls and, as a result, detention activities have had to receive a budgetary bailout from other Department funding sources. Although the Department has taken action to identify and address the FY 2004 and FY 2005 projected budget shortfalls, it is imperative that action be taken to refine the forecasting methodology that is used to project future detention bed space needs to more accurately estimate the resources needed to manage this essential Department function.

In addition, in the face of rising detention populations, the Department must endeavor to do what it can to contain costs, including reducing the time individuals spend in detention facilities, and if possible, reducing the cost of detaining individuals in non-federal facilities. Some of this is not within the OFDT's control - it is instead a function of the law enforcement community (adding new laws and investigative and prosecutorial initiatives that increase the number of individuals being detained), the courts (processing the detainees in a timely manner), and the BOP (timely designation of the assigned facilities for convicted criminal detainees). Therefore, it is essential that the Department support the efforts of the OFDT and other components to control rising detention costs, including evaluating the current strategy and controls over acquiring detention bed space.

Recommendations

We recommend that the Department and the OFDT:

Refine the forecasting methodology that is used to project future detention bed space needs to more accurately estimate the resources needed;

Evaluate the previously submitted FY 2006 budget request to determine if an adjustment needs to be made to ensure that a shortfall does not occur;

Continue efforts to reduce the average detention time during both the pre-trial and post-sentencing phases, including the pilot project on the Southwest border, and require the steering committee to report related results;

Examine the policies and practices regarding IGAs to develop additional areas in which detention costs can be reduced; and

Develop a plan for reviewing and verifying the allowability of costs associated with individual IGAs.

Footnotes

Public Law 106-553, enacted on December 21, 2000.

Appendix II contains information about each of the reports and projects prepared by the OFDT.

The USMS portion of the detention funding was approximately $700 million and the INS portion was approximately $600 million.

JPATS is discussed in more detail in Addition of JPATS.

MPS's efforts to develop a staffing plan are detailed in Department's Plans to Enhance the OFDT.

Similar arrangements were made for FY 2004. However, unlike FY 2003 for which only one reimbursement agreement was signed, the FY 2004 funds have been transferred using a series of monthly or bi-monthly agreements.

Senate Report 107-042, dated July 20, 2001.

Public Law 106-553.

At the start of our audit, the OFDT did not have a strategic plan, and no one that we contacted was aware of any efforts to create one.

Included in the personnel enhancements authorized in the FY 2003 budget was funding for the establishment of this as a Senior Executive Service position. Because the Detention Trustee position was vacant from January 2003 through June 2004, the Deputy Trustee position also was not filled.

When the OFDT took over responsibility for budgeting and forecasting, the former INS had already moved to the DHS. The OFDT is not responsible for budgeting and forecasting of detention needs outside of the DOJ.

The Wartime Supplemental Act (Public Law 108-11) was enacted on April 16, 2003.

Similar to the detention increases within the DOJ, DHS has reported an escalation in the number of alien detainees in ICE custody. Further, DHS personnel have reported funding difficulties related to the increase in detainees.

In addition to the increase in the number of detainee beds required, the detention budget was also affected by: 1) rescissions enacted along with the overall federal appropriation, and 2) internal Department reductions. OFDT budget personnel estimated these negative adjustments at about $20 million.

The Asset Forfeiture Fund is the repository for seized funds and the sale proceeds from forfeited property. These monies are primarily used to cover certain operating costs of the DOJ Asset Forfeiture Program. The Working Capital Fund (WCF) is a revolving fund subsidized by reimbursements from Department components for the cost of providing certain administrative services on a centralized basis. The WCF does not receive appropriated monies from Congress.

While some of our audits focused on and the related questioned costs were attributable to the former INS, our findings concerning the local calculation of the daily rate would apply to IGAs in general, regardless of the federal entity involved.

OIG Audit Report number GR-60-03-001-R, entitled "U.S. Immigration and Naturalization Service, and U.S. Marshals Service Intergovernmental Service Agreement for Detention Facilities with the Orleans Parish Criminal Sheriff's Office, New Orleans, Louisiana."